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Full text of "Comptrollership in the Bureau of Naval Weapons."

r "i 

COMPTROLLERSHIP IN THE BUREAU 
OF NAVAL WEAPONS 

*y 

H. B. McClure 
Commander, USN 



COHraOLLERSHIP IK THE BUREAU OF NAVAL WEAPONS 



by 



H. B. McClure 
Commander, USN 



Prepared for 
Dr. A. Rex Johnson 



Navy Graduate Comptroller ship Program 
The George Washington University 
Washington, D, C« 

April I960 



TABLE OF CONTENTS 

Chapter Page 

I. INTRODUCTION 1 

II. THE COMPTROLLERSHIP ORGANISATION AND 

FUNCTIONS IN THE BUREAU OF ORDNANCE 10 

III. THE COMPTROLLERSHIP ORGANIZATION AND 

FUNCTIONS IN THE BUREAU OF AERONAUTICS .... 15 

IV. MAJOR DIFFERENCES BETWEEN THE COMPTROLLERSHIP 
FUNCTION IN THE BUREAU OF ORDNANCE AND THE 
BUREAU OF AERONAUTICS 22 

V. ORGANIZATION AND FUNCTIONS OF THE 

COMPTROLLER, BUREAU OF NAVAL WEAPONS 31 

VI. THE REORGANIZATION OF THE FINANCIAL 

PLANNING FUNCTION WITHIN THE BUREAU 

OF NAVAL WEAPONS 41 

VII. CONCLUSIONS 48 

BIBLIOGRAPHY 55 



ii 



CHAPTER I 

INTRODUCTION 

The New Bureau of Naval Weapons 

The establishment of the Bureau of Naval Weapons on 
September 1, 1959 was a significant milestone in the evolution 
of the Navy's bureau organization. The Bureau of Naval Weapons 
is the largest single organization In the Navy Department, It 
comprises approximately 4,400 departmental personnel and over 
200,000 persons in the field establishment under its management 
control. Its annual budget is approximately $4.5 billion dollars 
a year (about 40$ of the total Navy Department). Its R&D 
budget includes about 10% of the total Navy R&D funds avail- 
able. The Bureau of Weapons exercises management control of 

approximately 50$ of the total physical plant of the Department, 

2 

including some 325 shore activities. 

Formation of the Bureau of Naval Weapons 
RftC9fflBgrc3,aUQn 9t Iftl Q9mX%\W «| Organization of the ffavy 
Department 1959 

^avy Management Review , NAVEXOS P-910, Vol. IV, 
No. 10, October, 1959 $ p. 3. 

2 
Bureau of Naval Weapons Organizational Planning Instruc- 
tion Number 7, Basic Concepts of the Organization of the Bureau 
of Naval Weapons . August 31. 1959. r>. 3. 



2 
The concept for the Bureau of Naval Weapons grew out 
of a recommendation of the Committee on Organization of the 
Department of the Navy 1959 to combine the Bureau of Ordnance 
and the Bureau of Aeronautics into one bureau. The recommenda- 
tion was based upon the necessity for the timely development and 
procurement of effective weapons and equipment, and for insuring 
full utilization of the outstanding professional and technical 
ability available to the Havy. The Committee concluded that 
the consolidation of the two Bureaus would result in the 
following advantages? 

1. Place approximately two- thirds of the total develop- 
ment effort of the Department (and much of the weapons systems 
development effort) under the direct authority and control of 

a single executive in the "producer" organization. 

2. Bring within the cognizance of a single bureau most 
of the troublesome areas of a split cognizance In weapons systems 
development (with particular reference to split cognizance 
within missiles and between missiles and aircraft). 

3. Coordinate and simplify the funding of major weapons 
systems, thereby expediting the development process. 

4. Expedite the timely development and procurement of 
all components of a weapons system. 

5. Promote economy through improved coordination and 
supervision and through more efficient use of facilities and 
laboratories . 

The objective of the organization of the Bureau of Naval 
Weapons is stated in the report of the Committee on Organization 



^Kavy Management Review, op. clt .. p. 5. 



3 

of the Department of the Navy ae follows: 

The primary objective of any reorganization of the 
current bureau structure Is to reduce the lead time 
between the expression of an operational requirement 
and the delivery to the combat forces of a fully 
developed and effective weapon or weapons system for 
service evaluation. * 

Implementation of the Committee Recommendation 

Organizational Planning Group .— -Hie responsibility for 
the implementation of the recommendation of the Committee on 
Organization of the Department of the Navy was assigned by the 
Secretary of the Navy to the Under Secretary. The Chief of the 
Office of Naval Materiel was directed to undertake the planning 
for the consolidation of the Bureau of Aeronautics and the Bureau 
of Ordnance in addition to his regular duties, and as such was 
designated as head of the Organizational Planning Group. A 
Rear Admiral, assigned on temporary duty from the Office of the 
Chief of Naval Operations, was designated as deputy to the Chief 
of Naval Materiel and was engaged full time on the Organizational 
Planning Group. A small staff of eight officers and five civil- 
ians, drawn from the Bureaus of Aeronautics and Ordnance, Office 
of Naval Materiel, Navy Management Office and Bureau of Supplies 
and Accounts, completed the Planning Groups-^ 

The Organizational Planning Group conducted detailed 
studies in the various areas of planning and control, research, 
material management, field establishments and supporting staff. 

4 
Bureau of Naval Weapons Organizational Planning 

Instruction Number 7» op. cit . . p. 3. 

5 

"Navy Management Review, op. cit .. p. 3. 



Full consideration was given In these studies toward an effective 
balance between the most desirable pattern of the Bureau of 
Naval Weapons organization and whatever disruption that would 
occur in all echelons of the two Bureaus to meet this pattern. 
As specific recommendations of the organizational structure of 
an area emerged, they were cleared by a screening committee 
consisting of the head of the Organizational Planning Group, 
the deputy, and the Chiefs of the Bureaus of Aeronautics and 
Ordnance. 

The patterns of the Bureau of Naval Weapons organization 
as formulated by the Planning Group were forwarded to the Bureau 
of Aeronautics and the Bureau of Ordnance for the development 
of detailed plans in each area. Such planning included the 
branch and section organization, complete functional statements 
and required personnel levels. The Organizational Planning 
Group then reviewed and adjusted each of these plans to insure 
consonance with the general philosophy and with other planning 
areas and returned these plans to the Bureaus for the development 
of the detailed billet structure and assignment of personnel. 
Recommendations of the Organizational Planning Jroun 

Specific Organizational Objectives . — The Organizational 
Planning Group conducted studies on the relative merits of a 
vertical organization versus a horizontal organization. The 
following is quoted in part from "Basic Concent of the Organiza- 
tion of the Bureau of Weapons" as prepared by the Organizational 
Planning Group: 

6 lMd. 



A truly vertical organization would permit maximum 
management control and coordinated effort. It would 
result in a virtually autonomous organizational grouping 
for each major project or program of the Bureau, How- 
ever, because there are 38 current weapons systems 
projects in the two Bureaus, 8 supporting systems 
programs and many other major Bureau lines of effort, 
a vertical organization structure was rejected. Such 
an organization would result in an untenable oompart- 
mentation of skills. 

Thus, the Planning Group undertook to develop a basic 
horizontal functional organization to which is applied a mecha- 
nism for vertical program management. It established the 
following specific organizational objectives:' 

1« To provide a horizontal functional grouping which 
would merge the skills of the Bureau of Aeronautics and the 
Bureau of Ordnance into operating groups concerned with Research 
and Development, Materiel Management and Field Support. 

2. To establish a program management structure that 
would provide a vertical management tool to guide, direct and 
provide Impetus to the Bureau's operating programs to the degree 
necessary to insure their expeditious accomplishment j and which 
could be readily adjusted to shift emphasis to new programs 
without basic reorganization of the Bureau. 

3. To provide an overall review of the Bureau's current 
and projected work within the prograai management structure. 

4. To reduce to a minimum the elements of management 
reporting to the Chief of Bureau to free him for his essential 
responsibilities in overall planning, organization, policy, 
financial direction and representation of the Bureau before 
external authorities. 



7 W>» p. 6. 



6 

5. To completely meld the skills of the Bureau of 
Aeronaut lcr- and the Bureau of Ordnance In like areas of effort 
with particular reference to missiles, 

6. To emphasize the fleet readiness effort of the 
Bureau. 

Organisational Structure and Operating Relationships .— 
In an analysis of the functions of the Chief of Bureau of 
Weaoons, the Organizational Planning Group determined that two 

o 

factors should be governing: 

1. The Chief of the Bureau should be freed to the 
maximum extent possible from day-to-day problems of operating 
management. His personal participation in internal management 
matters should be by exception only, and must necessarily be 
restricted to the most critical areas. 

2. The number of personnel reporting directly to the 
Chief of Bureau should be kept to the minimum that would permit 
him to discharge his resnonsibilities. 

The Organizational Planning Oroup listed the following 
functions which the Chief of the Bureau must reserve for his 
personal attention:^ 

1. Military Command 

2. Policy Direction 

3. Basic Planning 

4. Representation of the Bureau before external 
authorities 

o 

Bureau of Naval Weapons Organizational Planning 
Instruction Number 7» on. cit .. p. 3. 

9 Ibld .. p. 4. 



7 
5. Bureau relationship with industry and the public 
6* Organization 

7. Personnel eelection 

8. Financial direction 

9. Certain contractual and legal functions 
10, Bureau programs of ep*&tal slgnlfleaaoe, 

Under the Chief of the Bureau and the Deputy Chief, the 
Organizational Planning Group organized the Bureau of Weapons 
into three primary elements : 

1. The Staff Organization, consisting of those officials, 
and the components report ing to them, which advise and assist 

the Chief of the Bureau in the discharge of the responsibilities 
he has reserved for himself. These components also provide staff 
assistance and services to the rest of the Bureau as necessary 
and are: Office of Counsel, Patent Counsel, Inspector General 
and Assistant Chief for Administration and Comptroller. 

2. The Program Management Organization* consisting of 
those officials, and the components reporting to them, to which 
the Chief of Bureau has delegated authority and assigned respon- 
sibility for: integrating the Bureau's planning to meet require- 
ments of the Fleet; and providing across-the-board direction and 
coordination to the implementation of such plans. This element 
includes: 

Assistant Chief of Bureau for Program Management 
Assistant Chief of Bureau for Planning and Review 
Director of Strike Warfare Programs 

10 Ib^«. P. 5. 



Director of A/s Warfare Programs 

Director of Air Defense Warfare Programs 

Director of Support System Programs 

Director of Logistic Support Programs 

Director, PMR ana. Astronaut ic Programs 
3. The Operating Organization consisting of those officials, 
and the components reporting to them, to whom the Chief of 
Bureau has delegated authority and assigned responsibility for 
executing the approved programs of the Bureau for meeting the 
requirements of the Fleet* This element includes: * 

Assistant Chief of Bureau for Research Development, 
Test and Evaluation 

Assistant Chief of Bureau for Procurement and Production 

Assistant Chief of Bureau for Fleet Readiness 

Assistant Chief of Bureau for Field Support 

Legislation .— -During the progress of the Operational 
Planning Group, the request for legislative action for the 
establishment of the Bureau of Weapons and the disestablishment 
of the Bureaus of Aeronautics and Ordnance was submitted via 
channels to the Congress. The request was submitted on 14 May 
1959 and the President signed PL 86-174- on 18 August 1959 which 
provided for the aforementioned legislation. The Bureau of 
Weapons was activated on 1 September 1959. 

The Development of the Com-otrollershlo Function in the 
Bureau of Weapons . -« » It is the object of this thesis to: 

1. Examine the Comptrollership functions in the Bureau 



■ M — ■ W iW fc , 



11 

Ibid 



9 
of Ordnance and the Bureau of Aeronautics which were used as a 
basis for the Comptrollership function in the Bureau of 
Weapons. The chartore of organization and the functions of 
the Bureaus of Ordnance and Aeronautics, as they existed prior 
to the <3 is establishment of these Bureaus, are contained in 
Chapters II and III respectively. 

2. Examine the major differences between the Comptroller- 
ship function in the Bureau of Ordnance and that of the Bureau 

of Aeronautics. These differences, plus a list of those differ- 
ences which were termed problem areas by the Operational Planning 
Group, are contained in Chapter IV. 

3. Examine the Comptrollership function in the Bureau 
of Weapons as recommended by the Organizational Planning Group. 
The charter of organization and functions of the Financial 
Division, as adopted when the Bureau of Weapons was activated, 
is contained in Chapter V, 

4. Note any changes that have been made in the 
organizational structure and functions of the Comptrollership 
function since the activation of the Bureau. 

5. List conclusions concerning the Comptrollership 
function in the Bureau of Naval Weapons as developed by the 
Organizational Planning Group. 

6. List conclusions concerning the Comptrollership 
function in the Bureau of Naval Weapons aB it exists at the 
time this thesis is being written* 



CHAPTER II 

THE COMPTROLLERSKUP ORGANISATION AHS FOKCTICNS IN THE 

BUREAU OF ORDNANCE 

Prior to the disestablishment of the Bureau of Ordnance 
the Comptroller of the Bureau was headed by a civil service 
employee who reported directly to the Chief of the Bureau. The 

organization and functions of the Financial Division as they 

1 
existed at that time are as follows. 

General Statement of Functions 
Within the Bureau of Ordnance the Financial Division 
was organized on a vertical barls to perform the following 
assigned functions: 

1. Control ordnance appropriations and other funds 
available for the use of the Bureau of Ordnance and keep such 
records of fiscal transactions as necessary to prevent over- 
obligation or over-expenditure of the appropriations and funds 
for which the Bureau is responsible. 

2« Under the direction of the Chief of the Bureau, 
allocate appropriations and other funds among projects as neces- 
sary to carry out planning directives and determine the financial 
policies for each project under the Bureau's appropriations. 

Bureau of Ordnance, Organization and Procedure Manual . 
Chapter 3, T^?© !?♦ 

10 



11 

3. Devise and. administer the necessary reporting and 
recording procedures to effect fiscal policies and directives 
issued by the Comptroller of the Havy Department and higher 
authorities. 

4. Direct preparation of and review the Bureau's 
budget estimates and Justifications; review schedules and data 
prepared by responsible divisions and recommend requirements. 
To this end, promulgate Bureau oolicies and prepare necessary 
directives and instructions on the procedures and methode neces- 
sary to insure compliance with Bureau of the Budget, Secretary 
of Defense, and Navy Department budget policies, 

5« Analyse the Bureau* f budget estimates and require- 
ments and recommend to higher authority action concerning pro- 
posed budget revisions, reallocation of funds, and expenditures 
of surplus es . 

6. F.eview and approve all transactions involving 
expenditure of funds, 

7, Render periodic reports regarding the status of 
appropriation? and other special funds to responsible administra- 
tive officers, the Chief of the Bureau, and to authorities 
outside the Bureau of Ordnance. 

8. Perform internal audit functions for Bureau of 
Ordnance a pprop riations « 

9, Establish and maintain liaison with higher budgetary 
and fiscal echelon?., such as tne Office of the Comptroller of the 
Navy Department, and the Comptroller, Army Ordnance Corps, both 
within and Without the Kwy Je^artment, as necessary to discharge 
the budgetary and fiscal responsibilities of the Bureau of 



12 

Ordnance. 

Functions and Assistants 
The Deputy Comptroller of the Bureau of Ordnance was 
designated to perform the following assigned functions: 

1. To serve as Acting Comptroller and Division 
Director in the absence of the Comptroller and Division Director, 

2. Responsible for providing leadership and supervision 
for each of the branches of the Financial Division. 

3» Responsible for the development of fiscal policies 
of the Bureau and act as Special Assistant to the Chief on 
financial matters. 

The Assistant to the Division Director was designated 
to perform special assignments for the Comptroller and Division 
Director. 

Functions of Branches 
The Financial Division of the Bureau of Ordnance was 
divided into four Branches with the Branch heads reporting 
to the Comptroller and Deputy Comptroller. These Branches were 
designated to perform the following assigned functions. 
Fiscal, Systems Branch 

1. Organize and conduct internal audits and surveys of 
fiscal procedures in the Bureau of Ordnance, at naval ordnance 
establishments, and insofar as ordnance funds are concerned, at 
other stations. 

2, Act as consultant and advisor, while conducting 
internal audits and surveys to key personnel (military and 
civilians), on fiscal matters. 



13 
3» Devise, develop, establish and Implement methods 
of preparing station budgets and act as advisor to key field 
personnel concerning submission of the budgets to the Bureau of 
Ordnance . 

4. Act as special advisor on field fiscal problems 
to Comptroller of the Bureau of Ordnance and to personnel in 
other divisions of the bureau. 

5. Devise, develop, and direct installation of commer- 
cial-type financial procedures at field stations. 

6. Prepare manuals, handbooks and other directives 
pertaining to field accounting procedures. 

?• Design regular and special financial reports for 
use at field stations and in the Bureau of Ordnance. 

8. Analyze financial statements submitted by ordnance 
establishments, including those operating under commercial type 
financing procedures. 

9. Devise and develop cost accounting procedures and 
direct installation thereof at ordnance establishments. 

10. Design and direct installation of fiscal procedures 
used within divisions of the Bureau of Ordnance. 

11. Review organization and operation of fiscal 
departments at field stations. 

12. Perform special studies and analyses of bureau and 
field level financial problems. 

13. Ensure that fiscal systems are so designed as to 
provide direct and positive support of the Bureau* s budget 
planning. 



14 
14. Maintain liaison on financial matters with 
personnel (military and civilian) at navy comptroller level, 
as well as intra-bureau and inter-bureau. 

Administration and Accounting Branch 

1. Maintain, for all funds under the control of the 
Bureau of Ordnance, the official appropriation, obligation, 
expenditure and cost accounts. 

2. Maintain appropriate accounts to provide adequate 
management control of funds. 

3. Review acts of the Bureau and proposed acts for 
compliance with legal, executive and departmental requirements 
regarding the accounting, obligating and expenditure of funds. 

4. Develop and prescribe procedures for issuance of 
project orders and allotments. 

5. Issue project orders and allotments to field 
activities and review Bureau procurement documents for compliance 
with accounting and fiscal policies and legal limitations. 

6. Assume responsibility for the financial administra- 
tion of Bureau contracts,. 

7* Perform internal audits and special departmental 
audits as required. 

8* Prepare special reports as required by authorities 
outside the Bureau. 

9» Issue statements indicating the Bureau's financial 
position. 

10. Record ordnance construction costs of ships. 



15 
11. Review the rate of obligation of appropriations 
to insure utilization of opportunities. 

ffudget ftafl fisfrfcpat.ee Branch 

1. Review, analyze and approve raw data for inclusion 
in budget estimates for annual and continuing fiscal programs; 
coordinate and prescribe the Bureau's activities in the collec- 
tion, format and presentation of budget data. 

2. Make policy recommendations of budgetary matters 

to the Bureau comptroller. Recommend apportionment and distri- 
bution of all funds made available to the Bureau. 

3. Review division estimates and justification to 
insure compliance with policy and planning objectives of the 
Bureau, the Navy Department and the Defense Budget Advisory 
Committee. 

4. Review, analyze and coordinate supporting schedules 
and data prepared by responsible divisions for use by budget 
witnesses in presenting the Bureau's budget to various levels 
of review. 

5» Maintain budgetary controls over apportionments, 
fiscal programs and appropriation limitations for all appropria- 
tions and special fund accounts. 

6. Maintain liaison with the Office of the Navy 
Comptroller, Office of the Secretary of Defense and the Bureau 
of the Budget. 

Inter- Agency Operation a Branch 

1. Devise, develop and establish new and revised fiscal 
procedures pertaining to financial transactions with agencies 



16 

outside th© Bureau. 

2. Devise and implement financial reporting controls 
for the administration of other agencies 1 funds at shore 
establishments and the reporting thereof for management and 
budgetary purposes. 

3» Act as special advisor to the comptroller and other 
key personnel of the Bureau on matters pertaining to inter-agency 
funding operations. 

4. Recommend and advise on policy to be established by 
the Bureau in connection with financial arrangements consummated 
with other agencies. 

5. Design financial schedules such as status reports 
and reimbursement reports pertaining to financial transactions 
with agencies outside the Bureau for use by the Bureau and 
other agencies. 

6. Develop accounting Instructions for Bureau and field 
use in connection with the implementation of lnter-agency 
ordering procedures. 

7. Maintain appropriate accounts to provide adequate 
management control of other agencies 1 funds. 

8. Devise and develop methods to effect reimbursement 
or payment of funds through the sale of material or services 
by the Bureau. 

9» Coordinate financial practice within the Bureau in 
connection with inter-agency orders and funding. 

10. Maintain liaison on inter-afjency financial operations 
with Office of Navy Comptroller, Office of Army Comptroller, 
Office of Air Force Comptroller and offices of comptrollers 
of other agencies. 



CHAPTER III 

THE COMPTROLLERSHIP ORGANIZATION AND FUNCTIONS IN THE 

BURKAU OF AERONAUTICS 

Prior to the disestablishment of the Bureau of Aeronau- 
tics, the Comptroller of the Bureau of Aeronautics was headed 
by a Navy captain (1300) who reported directly to the Chief 
of the Bureau. The organization and functions of the Comptroller 
Division as they existed at that time are as follows. 

General Statement of Functions 

Within the Bureau of Aeronautics the Comptroller Division 
was organized on a vertical basis to perform the following 
functions: 

1. The Comptroller Division, a staff division under 
the Deputy and Assistant Chief, was responsible for developing, 
coordinating, and maintaining an integrated system of staff 
service in the financial management area that will provide 
management authorities with factual data for effective management 
control; for translating program requirements into the reouired 
financial plan and for preparing the Bureau of Aeronautics 
budget; for comparing program performance with the budget plan, 
analysing variances therefrom and determining where financial 

Bureau of Aeronautics, Organization and Procedure 
Manual . page CR-3. 

17 



18 
reprograming may be required; for coordinating a program 
progress and. statistical reporting system; and for accounting 
for all appropriations and funds under the control of the Bureau 
of Aeronautics. 

Functions of Assistants 
The Deputy Comptroller of the Bureau of Aeronautics 
was designated to perform the following assigned functions: 

1. Responsible to the Comptroller and assist him in 
administering and coordinating the work of the Divieion. 

2. Responsible for, ana the authority to act for the 
Comptroller in all matters normally the responsibility of the 
Comptroller in the absence of the Comptroller. 

The Planning Assistant 

Responsible to the Comptroller and Deputy Comptroller 
for coordinating the development and implementation of long 
range financial management plans, for assisting station commands 
in establishing local comptrollership programs, and for making 
special studies of financial management problem areas. 
The Administrative Assistant 

Responsible to the Comptroller and Deputy Comptroller 
for organizing and supervising the administrative functions of 
the Division, 

The Comptroller Division was divided into two large 
subdivisions. Budget and Accounting, with an Assistant Comptroll- 
er as head of each subdivision. The functions of these 
Assistant Comptrollers and their respective subdivisions and 
branches were as follows. 



19 

Assistant Comptroller for Budget 
Responsible for planning, coordinating, administering 
and controlling the budgetary functions, policies, and proce- 
dures relating to the appropriations and funds assigned to the 
Bureau of Aeronautics; for analyzing and reporting on the 
Bureau's program performance in matters of financial significance 
and for controlling the release of aviation personnel ceilings 
and funds to the Bureau of Aeronautics and itc field establish- 
ments. 
Budget Branch 

Responsible for planning, coordinating, administering 
and controlling the budgetary functions, policies and procedures 
relating to the appropriations of funds assigned to the Bureau 
of Aeronautics, 
Finanpial fififl&ag Branch 

Responsible for planning and admlniftering aviation allot 
rcent and project order policies and procedures; for reviewing 
proposed field operating programs, for approving allotments and 
project orders and for planning, in collaboration with Bureau 
divisions » and administering civilian and military manpower 
requirements programs. 

yreKrftjyp Btiftflsiafi Bfiasafe 

Formulates guides and criteria for the collection and 
classification of statistical data as required to present &n 
analysis of quantitative and financial performance. 



20 

Assistant Comptroller for Accounting 

Responsible for planning, coordinating, administering, 
and controlling accounting policies, systems, and procedures 
and for accounting for and maintaining records of all appropria- 
tions and funds assigned to the Bureau of Aeronautics, 
Accounts ffrapch, 

Responsible for planning, coordinating, administering 
and controlling accounting policies, systems, and procedures 
within the Bureau and for acoounting and for maintaining records 
of all appropriations and funds as Pinned to the Bureau of 
Aeronautics. 
Financial Syeteme Branch 

1* Supervises and coordinates all budgetary and 
financial management functions at aviation field establishments, 

t.« Acts as special adviser to operating divisions of 
the Bureau of Aeronautics and to ftviation field establishments 
on all matters of cost reporting, cost accounting, work measure- 
ment, industrial funding, and general accounting methods, syst- 
ems, and procedures pertaining to or effecting field establish- 
ments • 

3. Devises, in consultation with operating divisions 
as necessary, and directs the installation of Indus trial- type 
cost accounting, general accounting, and work measurement syst- 
ems for the administration of aviation funds expended and stores 
and property used throughout the aeronautical field establish- 
ment. 

4. Reviews and revises existing field accounting and 



21 

worlc measurement systems and reports to meet changing manage- 
ment conditions and to insure compliance with new or revised 
Bureau, Departmental, and statutory regulations . 

5. Formula tee, prepares, and issues directives and 
manuals pertaining to financial management matters at the 
field level, including budgetjng (procedures for which have been 
approved by the Assistant Comptroller for Budget), general 
accounting, cost accounting, work measurement, and related 
statistical reporting. 

6. Organizes and conducts management surveys of 
financial and work measurement procedures at aviation field 
ostablichmontr. , 



CHAPTER IV 

TIA-TOR DIFFERENCE? BETWW SHJB aOMPTROIJ.KRBHI? 
FUNCTION IIS THE BUREAU OF ORDKAlsCZ AND v 
BUREAU OF AERONAUTICS 

Hhe Comptrollers hip organization and functions in th© 
Bureau of Ordnance and the Bureau of Aeronautics, as they 
existed prior to the consolidation of the two Bureaus, had 
been developed to raeet the requirements of each of the Bureaus. 
The Gomptrollership function in each of the Bureaus was based 
on the fulfillment of the duties and responsibilities of the 
Comptroller if the Navy ae out-lined in the national Security 
Act of 1<H7 and as amended by Public Law 216* which was approved 
10 August 1947. Under the requirements of the law, it was 
necessary for all Bureaus and offices of the Navy Department to 
set up ft system of reporting financial information to the 
Comptroller of the TJavy. Basic concepts of organisation and 
for the reporting of financial information were recommended in 
Nav3' Department instructions; however the organization and meth- 
ods of handling the Comptroller ship function in the individual 
Bureaus fti£f«r*d between the Bureaus, largely as to the require- 
ments and nature of each Bureau, as well ae to the interpretation 
of these basic concepts. A difference in handling the Comptroll- 
ership function in the Bureau of Ordnance and Bureau of 

22 



23 
Aeronautics Is apparent in examining the foregoing Chapters II 
and III. 

Inspection of the organization and Comptroller ship 
functions in the Bureau of Ordnance and Bureau of Aeronautics 
indicates that several major differences existed and that it was 
necessary for the Organizational Planning Group to resolve these 
differences in establishing the Comptroller ship function for the 
Bureau of Weapons. These major differences are as follows. 
Designation of Comptroller 

The Bureau of Aeronautics had a military comptroller 
assigned (Captain) and five Commanders located primarily at 
Branch Head level. 

The Bureau of Ordnance had a civil service employee as 
Comptroller and the entire Comptroller Division was composed of 
civil service employees. 
Installation of Navy Industrial Fund Accounting 

The Bureau of Aeronautics had two Industrial Fund instal- 
lations, NAF Indianapolis, and the and R Facility at Quonset 
Point. 

The Bureau of Ordnance had eight field activities under 
the Navy Industrial Fund concept and four additional stations 
under consideration for conversion. 
Budgeting for Station Overhead 

The Bureau of Aeronautics budgeted for station overhead 
separately and funded overhead costs by issuing ,1 A M allotments 
to the stations. Non- industrial accounting was used at the 
stations. 

The Bureau of Ordnance followed the basic maintenance 



24 
concept (cost of overhead If there Is no productive work) and 
charged the balanoe of the overhead to the end product. Navy 
Industrial Fund and modified industrial accounting were both 
in use at the station level. 

Handling of Manpower Celling Control and Work Measurement 
Functions 

These functions were handled by the Comptroller Division 
in the Bureau of Aeronautics. 

In the Bureau of Ordnance, these functions were handled 
either in the Administrative Division or the Naval Ordnance 
Shore Establishment Divisions. 
Responsibility for Station Budgets 

The Bureau of Aeronautics Comptroller had partial 
responsibility for Station budgets. 

In the Bureau of Ordnance this function was assigned 
to the operating divisions and was coordinated by the Naval 
Ordnance Shore Establishment Division. 
Assignment of Responsibilities of Seotlon 5679 Revised Statute 

In the Bureau of Aeronautics the responsibility for over- 
obligation and/or over-expenditure of funds was vested in and 
retained by the Chief of the Bureau. 

In the Bureau of Ordnance this responsibility was 
delegated to the Comptroller. 
Responsibility for Progress R eporting and graphic Presentation 

The Comptroller had functional responsibility for these 
matters in the Bureau of Aeronautics. 

The Comptroller, Bureau of Ordnance was limited in this 
area of responsibility. 



25 
Stations and Offloes Involved in Fund Accountability 

The Bureau of Aeronautics had approximately 100 stations 
and 100 miscellaneous offices. 

The Bureau of Ordnance had approximately 35 major and 
17 minor field activities in this category. 

Basic Comptroller Objectives 
In considering the Specific Organizational Objectives 
for the Bureau of Weapons, the Organizational Planning Group 

formulated the following basic functional objectives for the 

1 
Comptroller: 

1. Develop financial policies and systems. 

2. Supervise budgetary planning and management, 

3. Serve as advisor to management to promote efficiency 
and economy In the management of resources. 

4. Fulfill legal accountability for such matters as 
submission of required financial reports to outside agencies 
and submission of certification of validity of obligations, etc. 

5« Render financial management reports for top manage- 
ment and other bureau use. 

Placement of the Comptroller Function 
Under the Specific Organizational Objective "To reduce 
ta a minimum the elements of management reporting to the Chief 
of the Bureau to free him for his essential responsibilities in 
overall planning, organization, policy, financial direction 
and representation of the Bureau before external authorities," 
various alternative locations for the Comptroller in the Bureau 

Bureau of Naval Weapons Organizational Planning 
Group Memorandum, August 17, 1959. 



26 
of Weapons organization were considered. After studying the 
overall concept of proposed organization, it became apparent 
that there were three possible places to locate the Comptroller J 

1. Staff Assistant reporting directly to the Chief 

2. Staff Assistant under the Assistant Chief 
for Administration 

3» Staff Assistant to the Assistant Chief for 
Program Management. 

The merits of each of these locations were considered to 

2 
be as follows: 

1. Location in a Staff position reporting directly to 
the Chief would enable ready access by the latter to all finan- 
cial data, which the Comptroller should have at hand without 
the necessity of dealing with an intervening functional title 
in the chain of command. Under the general guidance from the 
Chief, the Comptroller would develop an overall financial plan, 
working closely with the Staff of the Assistant Chief for Program 
Management. The Comptroller would accomplish financial report- 
ing, which represents part of the total data needed by the Staff 
to evaluate progress against the plan. The Comptroller would 
coordinate the budget, maintain official accounting records, 
ensure that legal requirements for financial data are fulfilled, 
and furnish interpretative and analytical data of a financial 
nature to the Chief, Assistant Chief for Program Management, and 
other Assistant Chiefs. Location ae a Staff Assistant reporting 
directly to the Chief would provide the most effective way of 

2 
Bureau of Naval Weapons Organizational Planning 

Group Memorandum, August 17 , 1959. 






• 



; 






27 
instituting? a system of checks and balances on which the 
general departmental concept is founded. Additionally, it would 
keep routine Comptroller functions, such as maintenance of 
official accounting records, out of the areas of the Assistant 
Chief for Program Management and the Assistant Chief for 
Administration. Also, it would endorse the utilization of the 
usual commercial business concept which, as a general rule, 
positions the Comptroller as a Staff Assistant reporting directly 
to top management. 

2. Placing the Comptroller under the Assistant Chief 
for Administration would be advantageous from the standpoint of 
reducing, by one, the number of persons reporting directly to 
the Chief, There would also be some advantage in placing the 
Comptroller function under a Rear Admiral serving as Assistant 
Chief for Administration. It would be more likely that forceful 
actions and better results would be obtained. This advantage 
naturally becomes involved with the rank or grade, and personal- 
ity of the person selected as Comptroller. 

3. Location of the Comptroller as Staff Assistant to 
the Assistant Chief for Program Management has the advantage of 
enabling a closer working relationship between the Plans Staff 
and the Comptroller Staff, with full and close coordination by 
the Assistant Chief for Program Management. It is also likely 
that placement of the Comptroller under the Assistant Chief for 
Program Management, whose staff would undeniably be the hard 
core of the new Bureau, would reduce the possibility of budgeting 
and accounting units being formed in the operations areas of 
other Assistant Chiefs. 



28 

The above reasons were considered to be more theoretical 
than real. As a practical matter, there was a belief by some 
that placing the Comptroller under the Assistant Chief for 
Program Management might not prove to be particularly effective. 
The plans for the new organization indicated that the Assistant 
Chief for Program Management would be extremely powerful as a 
member of the organization and if the Comptroller were to be 
placed on his staff he would be even more powerful. The general 
opinion seemed to be to guard against concentrating too much 
power in any one area or individual. 

The Organizational Planning Group decided that the 
Comptroller division should function as an independent staff and 
that the Comptroller would report directly to the Chief of the 
Bureau for the reasons stated above and the following additional 
reasons : 

1. Substantial funds in the administrative area (appro- 
ximately $40 million) could not be handled as effectively if 
the Comptroller were to be placed under the Assistant Chief 

for Program Management. 

2. SECNAV Instruction 5400.4 of 18 November 1953 states 
that the Comptroller should report to the Bureau Chief. 

3. Fulfillment of legal requirements and liaison with 
the Navy Comptroller can be performed better. 

Resolution of Comptroller Responsibilities 
In examining the functions of the Comptroller, Bureau 
of Aeronautics and the Comptroller, Bureau of Ordnance it becomes 
apparent that each differed with the other in certain functional 



■ 

■ 

! 









29 
responsibilities. The major differences as to function as 
contained in the foregoing and the decisions rendered by 
the Organization Planning Group were as follows. 
^Manpower Administration as a Comptroller Function 

In the Bureau of Aeronautics, the Comptroller Division 
released manpower ceilings to field stations. In the Bureau of 
Ordnance the Naval Ordnance Shore Establishments Divisions was 
responsible for field manpower ceilings. The Operational Plann- 
ing Group recommended that manpower administration be included 
as a function of the Comptroller in the Bureau of Weapons. 
Work Measurement as a Comptroller Function 

Work measurement was handled by the Comptroller, Bureau 
of Aeronautics, whereas this function was a responsibility of 
the Naval Ordnance Shore Establishments Division in the Bureau of 
Ordnance. The function in the Bureau of Aeronautics consisted 
of keeping the work measurement system up-to-date, obtaining 
performance data for both Bureau and field activities, making 
data available to users and reviewing the data in conjunction 
with field requests for ceiling increases or decreases. The 
Organizational Planning Group recommended that Work Measurement 
be Included as a function of the Comptroller in the Bureau of 
Weapons . 
Responsibility for Station Budgeting 

As previously stated the Bureau of Aeronautics Comptrol- 
ler had partial responsibility for this function. In the Bureau 
of Ordnance, this function was assigned to the operating divisions 
and was coordinated by the Naval Ordnance Shore Establishment 
Division. The Operational Planning Group recommended that the 



30 
responsibility for station budgeting be assigned to the Shore 
Establishments Division but that the Comptroller, Bureau of 
Weapons would be responsible for "Planning, coordinating and 
administering and controlling policies, systems and procedures 
for station budgets." 
Graphics Presentation 

Under the concept that the Assistant Chief for Programs 
Management would be the principal user of Graphics Presentation, 
the Organizational Planning Group recommended that the function 
be assigned to the Assistant Chief for Program Management. 

The Organizational Planning Group decided that the 
following Comptroller matters coul* b© resolve* Internally after 
the Comptroller Pf.vis5.or, Bureau of Aeronautics was activated* 

1. Extent and rate of Navy Industrial Fund installations 

2, System of budgeting for station overhead 

3* Financial management reporting within the Bureau 
A. Assignment of responsibility in connection with 

Section 3679 Revlned Statutes. 

5* Desirability of combined accounting functions for 

certain stations. 



CHAPTSR V 

ORGANIZATION ANP FUNCTIONS OF THE COMPTROLLER, 
BUREAU OF NAVAL WEAPONS 

Hie Organizational Planning Group, after considering 
the differences that existed between Comptrollership organization 
and functions in the Bureaus of Ordnance and Aeronautics, recom- 
mended a plan for the establishment of the Comptroller component 
in the Bureau of Weapons. The plan was transmitted to the Chief, 
Bureau of Ordnance and the Chief, Bureau of Aeronautics and both 
of these officials approved the plan with the incorporation of 
minor changes. The plan recommended that a Navy captain (1300) 
be assigned as Comptroller and the former civil service Comptroll- 
er of the Bureau of Ordnance be assigned aa Deputy Comptroller. 
Xhe recommended plan for organization and functions of the 
Comptroller, Bureau of Weapons, is as follows. 

General Statement of functions 
The Corrrpt roller is responsible to the Chief of the Bureau 
of Naval Weapons for an integrated financial management system 
that provides management vith data for effective management 
control of resources, planned, available, MIS utilized for 

1 

Joint Memorandum (Chief, Bureau of Ordnance and Chief, 

Bureau of Aeronautics), Organizational fanning for the Bureau 

4u O » 



iomnt roller Area , ZkuguFt 28, 1959. 
31 



32 
carrying out the Bureau programs; for translating program 
requirements into financial plans; for preparing the Bureau's 
budget; for managing allocation of funds and personnel ceilings 
to support approved programs; in consonance with the Assistant 
Chief for Program Management comparing program performance with 
financial plans, analyzing variances therefrom and determining 
where financial reprogramming is required; for account classifi- 
cation of programs and program elements to provide a meaningful 
arrangement of segregating and compiling financial data; for 
insuring compliance with statutory requirements and administra- 
tive regulations for appropriations and funds; and for accounting 
for all appropriations and funds under the control of the Bureau 
of Weapons. Performance of his duties requires close working 
relationships with the Assistant Chiefs of the Bureau. Specific- 
ally, the Comptroller is responsible for: 

1. Providing an Integrated financial management system 
of budgeting, accounting, reporting, and review and analysis 
which will bring to management data for planning, evaluating 
and controlling. 

2. Translating program requirements into an effective 
financial plan. 

3. Planning, coordinating, administering and controlling 
budgetary policies, procedures and functions, relating to all 
Bureau appropriations and funds. 

4. Coordinating and administering the development of 
budgetary data and preparing, Justifying, and executing the 
Bureau budget • 



33 
5» Developing manpower ceiling policies and coordinating 

the integration of manpower resources (civilian and military) 
with financial plans and program requirements, 

6. Managing allocation of funds and personnel ceilings 
(military and civilian) within the Bureau of Naval Weapons and 
to its field activities. 

7» Insuring compliance with statutory requirements and 
administrative regulations for appropriations and funds allocated 
to the Bureau. 

8. Providing finanoial data to the Analysis and Review 
Division for review and analysis of the Bureau's operating 
programs • 

9* Reviewing, in conjunction with the Assistant Chief 
for Program Management, operating program performance and 
finanoial plans and recommending corrective action where an 
imbalance exists. 

10. Coordinating operating performance and financial 
plans with operating Assistant Chiefs of the Bureau. 

11. Planning, coordinating, administering and controlling 
policies systems and procedures for accounting for, and maintain- 
ing the official control records for, all appropriations and funds 
assigned to the Bureau, 

12. Providing financial progress and financial statistic- 
al reporting for Bureau management and external use. 

13. Reviewing, analyzing, coordinating, and recommending 
action on audits and other special findings involving financial 
management in the Bureau and its field activities. 



34 

14. Recommending course* of action to promote efficiency 
end economy in the management of the Bureau's resources. 

15. Developing and coordinating financial data process- 
ing techniques and application to a single integrated accounting 
system and associated, reporting systems throughout the Bureau 
and its field establishments. 

16. Planning, coordinating and administering policies, 
procedures and functions of comptrollership in the field activi- 
ties of the Bureau, 

17* Planning, coordinating and administering and 
controlling policies, systems and procedures for station budgets 
and work measurement programs. 

18. Reviewing, analyzing, coordinating and recommending 
action on station budgets and work measurement programs. 

19. Official liaison with the Navy Comptroller's 
Office, Defense Comptroller's Office, the Bureau of the Budget, 
the Appropriations Committees of the Congress, and the General 
Accounting Office, Liaison with CNO, other Bureaus and agencies 
for budgetary and accounting matters. 

Functions of Deputy Comptroller and Special Assistants 

The Deputy Comptroller is responsible to the Comptroller 
for executive direction of the day-to-day affairs of the Office 
of the Comptroller, and for assuming full stewardship of office 
when the Comptroller is away from the Bureau. 

The Assistant Comptroller, Financial Management, is 
responsible for serving as staff to the Comptroller in the 
development of studies and recommendations on matters which 



35 
Involve development of an overall program for the Comptroller 
organization. He performs special studies and serves on 
committees on matters related to the Comptroller program. 
Other Special Assistants perform special assignments as directed 
by the Comptroller. 

Functions of Assistant Comptrollers 
The next level in Comptroller organization below the 
Deputy Comptroller is divided Into three Assistant Comptrollers 
and each of these areas is further divided into Divisions, 
Branches, and Sections. The three Assistant Comptrollers are 
Assistant Comptroller, Financial Operations and Systems, Assist- 
ant Comptroller, Financial Review and Analysis, and Assistant 
Comptroller for Budget. The functions of these Assistant 
Comptrollers and the Divisions and Branches wherein their 
responsibilities are further subdivided are as follows. 
Assistant qqmptroUer— Financial OperatjLonj and; ^sterns 

The Assistant Comptroller, Financial Operations and 
Systems, is responsible to the Comptroller for developing and 
coordinating the principles, policies, and practices which will 
produce comprehensive financial management systems to meet the 
requirements of the Bureau, higher authority and statutes; 
administering and controlling financial accounting and status 
reporting for funds under the jurisdiction or custodial respon- 
sibility of the Bureau. Specifically, the Assistant Comptroller, 
Financial Operations and Systems, is responsible for? 

1. Planning, developing, coordinating and Implementing 
financial management systems of the Bureau and its field 



35 
involve development of an overall program for the Comptroller 
organisation. He performs special studies and serves ojri 
committees on matters related to the Comptroller program. 
Other Special Assistants perform special assignments as directed 
by the Comptroller* 

Functions of Assistant Comptrollers 

The next level in Comptroller organization below the 
\ 

V f 

Deputy Comptroller is divided into three Assistant Comptrollers 

and each of these areas is further divided into Divisions, 

Branches, and Sections. The three Assistant Comptrollers are 

Assistant Comptroller, Financial Operations and Systems, Assist- 

ant Comptroller, Financial Review and Analysis, and Assistant 

Comptroller for Budget. The functions of these Assistant 

Comptrollers and the Divisions and Branches wherein their 

responsibilities are further subdivided are as follows. 

/ 

fhe Assistant Comptroller, Financial Operations and 

=,.,.... , JZL - «. — ,. „ .«*, - 

coordinating tie principles, policies, and practices which will 
produce comprehensive financial management systems to meet the 
requirements of the Bureau, higher authority and statutes; 
administering and controlling financial accounting cfcpd statue 
reporting for funds under the Jurisdiction or custodial respon- 
slbillty of the Bureau. Specifically, the Assistant Comptroller, 
Fin/ncial Operations and Systems, is responsible fori 

1. Planning, developing, coordinating and implementing 
financial management systems of the Bureau and its field 



36 
establishment, 

2. Administering and controlling systmis and procedures 
for accounting for, and maintaining the official records for, 
all appropriations and funds assigned to the Bureau. 

3# Issuing all authorizations to expend funds under 
the jurisdiction or custodial responsibility of the Bureau. 

4, Developing and coordinating processing techniques 
and applications to a single integrated accounting system and 
associated reporting system throughout the Bureau and its field 
establishment. 

5, Promulgating industrial fund instructions and 
coordinating and participating In hearings relative to the 
annual budget submissions. 

6, Determining feasibilities of NIF Installations and 
participating in all NIF panels in systems development and 
implementation thereof in field activities. 

7« Developing uniform terminologies, classifications, 
and procedures for fiscal, cost, and property accounting within 
the Bureau and its field establishments. 

8. Providing status reporting on all funds under the 
Jurisdiction or custodial responsibility of the Bureau to meet 
internal and external management requirements. 

9. Planning, developing and coordinating work perform- 
ance reporting systems having financial significance. 

The functions of the Assistant Comptroller, Financial 

Operations and Systems are divided into the following Divisions 
and Branches: 



37 

1, The Financial Operations Division, with a Special 
Assistant assigned for Systems, is subdivided into the following 
Branches! Financial Control Branoh; Inter Agency Financing 
Branch; Accounting Branoh; Accounting Control Branch. 

2. Financial Systems Division , with a Special Assistant 
for Automated Data Processing is subdivided into the following 
Branches? General Systems Branch; Industrial Cost Systems 
Branch; Navy Industrial Fund Systems Branch; Work Measurement 
Systems Branch. 

Assistant Comptroller — Financial Review and Anal ysis 

The Assistant Comptroller, Financial Review and Analysis, 
is responsible to the Comptroller for developing, coordinating 
and administering the principles, policies, practices and 
techniques which will produce a comprehensive financial review 
and analysis program to meet the Bureau of Naval Weapons program 
requirements, detecting variances from, or adjustments needed 
to financial plans, policies, procedures and systems and provid- 
ing management with recommended action; planning, developing, 
preparing and publishing financial progress reports for the use 
of top Bureau management in determining progress against planned 
objectives; maintaining the Bureau's financial plans; preparing 
the Bureau' p position with respect to audits; servioing finan- 
cial systems; and monitoring the comptrollership program of the 
field activities. Specifically, the Assistant Comptroller, 
Financial Review and Analysis, is responsible for: 

1. Providing financial progress and statistical report- 
ing for Bureau management. 



38 

2. Maintaining the Bureau's financial plans. 

3. Reviewing, analyzing and recommending to management 
measures to improve the effectiveness of financial controls, 

4. Recommending action to promote efficiency and 
economy in the management of the Bureau's resources. 

5* Monitoring the functions of corant roller ship in the 
field activities. 

6. Providing financial data to the Analysis and Review 
Division for review and analysis of the Bureau's operating 
programs. 

7. Reviewing, in conjunction with the Assistant Chief 
for Program Management, program performance and financial plans 
to insure mutual consistency. 

The functions of the Assistant Comptroller, Financial 
Review and Analysis are divided into the following Divisions and 
Branches i 

The ^ Finan c ial Cy stents Analysis Division . — Comp troll ership 
Evaluation Branch; Financial Systems Evaluation Branch. 

The Financial Program Analysis Division . — Financial 
Fvepcrting and Analysis Branch; Graphics Branch. 
miilUt Comptroller for Budget, 

The Assistant Comptroller for Budget is responsible to 
the Comptroller for developing and coordinating principles, 
policies, practices and techniques which will produce comprehen- 
sive budget systems to meet the requirements of the Bureau, 
higher authority arid statutes. He serves as a supporting wit- 
ness to the Chief of the Bureau in the justification of bureau 
budgets. He supervises budget planning, preparation and 



39 
execution, including monitoring of expenditures* His office is 
the focal point in the Bureau for budget and related matters. 
He develops policy with respect to civilian and military callings 
and station budgeting. Specifically, the Assistant Comptroller 
for Budget is responsible fori 

1. Providing an Integrated budget system through 
utilizing automatic data processing and other methods which will 
provide optimum data for budget preparation and justification. 

S, Planning, coordinating, administering and controlling 
budgetary policies, procedures and functions relating to all 
Bureau appropriations and funds. 

3. Translating program requirements and funding into 
an effective financial plan. 

4. Coordinating the development of budgetary data and 
preparing and participating in Justification of the budget. 

5. Reviewing, analysing and recommending action on all 
budget estimates, apportionment requests, and reprogrammlng 
proposals. 

6. Coordinating the development of apportionment data 
and preparing and justifying requests for apportionments and 
allocation of funds. 

7. The release of assigned funds to support approved 
operating programs where authorized by Assistant Chief for 
Program Management. 

8. Monitoring the execution of the budget, conducting 
appropriate reviews of budget execution and preparing reports on 
statue of program accomplishment. 

9. Managing military and civilian personnel ceilings, 



40 
and station budgeting, 

10. Exercising general supervision and control over 
the apportionment, allocation and utilization of funds in order 
to assure compliance with applicable statutory and administra- 
tive requirements and the most effective management of the 
Bureau's financial resources. 

11. Reviewing and analyzing proposed field operating 
programs in conjunction with financial and manpower planning. 

The functions of the Assistant Comptroller for Budget 
are divided into the following Divisions and Branches: 

Budget Policy and Planning Division . — Budget Policy 
and Procedures Branch; Budget Planning Branch. 

Budget Operations Division (Special Assistance Staff 
reporting to Division Head).— Research, Development, Test and 
Evaluation Branch; Production and Procurement Branch; Operations 
and Maintenance Branch; Military Construction and Facilities 
Branch, 

Manpower Control and Station Budgeting Division . — Two 
staffs, Manpower Coordination Staff and Station Budget Coordina- 
tion Staff, reporting to Division Head. Field Support Branch; 
Fleet Readiness Branch; Research Development Test and Evaluation 
Branch. 



CHAPTER VI 

THE REORGANIZATION OF THE FINANCIAL PLANNING FUNCTION 
..1THIN THE BUREAU OF NAVAL WEAPONS 

Interrelationship of Financial Planning Functions 
between the Assistant Chief for Program Manage- 
ment and the Comptroller 
Basic Functions of Program Management 

Under the Chief and Deputy Chief, Bureau of Weapons, 
the horizontal structure of the Bureau is divided into three 
primary elements: the Staff Organization, the Program Management 
Organization and the Operating Organization. The Program Manage- 
ment Organization as developed by the Organizational Planning 
Group encompasses planning for the accomplishment of aircraft 
and weapon systems requirements and the evaluation of performance 
in meeting requirements. The ultimate responsibility for effec- 
tive program management rests with the Chief of the Bureau, 
however because of necessary concentration with matters, sub- 
stantial authority has been delegated to the Assistant Chief for 
Program Management to deal with specific internal management 
of the Bureau's programs. Kie Program Management Organization 
combines a staff function of planning and review with a closely 
interrelated function of executive direction of the Bureau's 
programs. The Organizational Planning Group recommended that 

41 



42 
In terms of basic functions, the Program Management Group 
should provide; 1 

1. For the Bureau planning function including 
dissemination to operating groups of pertinent planning factors 
and requirements. 

2, A mechanism for coordinating and integrating into 
Bureau programs the Development, Production and Support plans 
prepared by the operating Assistant Chiefs of the Bureau. 

3» A further mechanism for Issuing program directives 
directing implementation of programs and the authority to adjust 
timing and effort of programs to best meet requirements. 

4. A comprehensive inventory of the Bureau's current 
and projected effort stated in terms of a manageable number of 
operating programs. 

5. A continuing analysis and review of programs both 
in terms of quantitative progress, timing and financial status. 

6. Coordinating responsibility for certain funding 
actions, including authorization to release programmed funds 
when programs are implemented. Bureau operating procedures should 
delineate those programs which are approved and for which funds 
are authorized in the routine apportionment process and those 
programs for which specific planning directives, including fund 
authorization, will be issued. 

Included also is the review and approval of budget 
estimates, apportionment and reprogramming actions for consonance 
with program requirements. The approval of the Comptroller aa to 

1 
Bureau of Naval Weapons Organizational Planning 

Instruction Number 7, Basic Concepts of the Organization of the 

Bureau of Naval Weapons . August 31 i 1959, p. 8. 



43 
legality and fiscal desirability is required to complete a 
financial action. Lack of concurrence by either party to such 
action or financial actions in excess of certain limitations 
require decisions by the Chief of the Bureau in discharge of 
his personal responsibility for financial direction of the 
Bureau, 

7. A mechanism to impart impetus and vertical direction 
to programs to the degree necessary. This organization should be 
of such character as to be readily adjusted to meet changing 
requirements for progress without rebuilding the structure of 
the Bureau. This mechanism must hare sufficient prestige and 
authority to be effective. The alternative is a waste of man- 
power and effort in additional vertical structures hung on the 
Bureau as each new high priority requirement develops. 

8. An operating position of sufficient authority and 
prestige to relieve the Chief of the day-to-day problems of 
program interrelationships between the operating Assistant Chiefs 
of Bureau and to discharge for the Chief, Bureau-wide respon- 
sibilities in such fields as Safety and Quality Control. 

The above functions are divided into areas of s Planning, 
Analysis and Review; Program Direction; Delegation of Bureau-wide 
Operating Responsibilities; Development of Progress Reporting and 
Other Management Systems; Policy Direction in the Electronic 
Data Processing Fields. 

loXmQlzUvn^Xv flf finance &&ai&M FupftUOB 

Examination of the above basic functions of the Program 
Management Organization as recommended by the Organizational 
Planning Group and those for the Comptroller indicates an 



44 

overlapping or, in effect, dual responsibilities with respect 

to the Bureau of Weapons budget. 

The Comptroller under the General Statement of Functions 

as stated in Chapter V is charged with the responsibility 

for an Integrated financial management system that 
provides management with data for effective management 
control of resources, planned, available and utilized 
for carrying out the Bureau's programs; for translating 
program requirements into financial plans; for preparing 
the Bureau f s budget and for managing allocation of funds 
and personnel ... to support approved programs. 

Ike Assistant Chief for Program Management, under the 

basic functions, provides for "a continuing review of programs 

both in terms of quantitative progress, timing and financial 

status." Under the coordinating responsibility for funding 

actions, the Program Management Organization maintains the 

responsibility for "authorization to release programmed funds 

when programs are implemented," and "review and approval of 

budget estimates, apportionment and reprogramming actions for 

consonance with program requirements." The approval of the 

Comptroller as to legality and fiscal desirability is required 

to complete a financial action. 

Reorganisation of l^anagement Policy in the 

Bureau of Weapons 
Shortly after activation, a reorganization of Bureau 
management policy was generated. In recognition of the need 
for reorganizing the management policy, BUWEPS Instruction 5200.2 
"Management Policy for the Bureau of Weapons," dated 30 December 
1959, was promulgated. Among other matters wherein policy was 
delineated, Enclosure I of the Instruction, entitled "General 



45 
Statement of Functions" announced policies for the Offlee of 

the Comptroller and the Assistant Chief for Program and Manage- 

2 
merit Plane as follows. 

Office of the Comptroller 

The Comptroller is responsible to the Chief of the 
Bureau of $aval Weapons for an integrated financial management 
system that provides management with data for effective management 
control of resources, planned, available, utilized, for carrying 
out the Bureau programs; for preparing the Bureau's budget and 
participating in the Justification of Bureau budgets at all 
levels of review; for managing allocation of funds and personnel 
ceilings to support approved programs; for account classification 
of programs and program elements to provide a meaningful arrange- 
ment of segregating and compiling financial data; for insuring 
compliance with statutory requirements ana administrative 
regulations for appropriations and funds; and for accounting 
for all appropriations and funds under the control of the Bureau 
of Weapons, 
Assistant Chief for Program and Management Plans 

The Assistant Chief for Program and Management Plans 
is responsible to the Assistant Chief for Program Management 
for interpreting and evaluating requirements from higher author- 
ity and integrating these requirements Into Bureau plans; direct- 
ing the development of Bureau plans and management systems; 
integrating Bureau program requirements; reporting and making 
performance appraisal of Bureau progress; translating programs 



2 Bureau of Naval Weanons, BUWEPS 5200.2, Ma nagement 
Policy for the Bureau of Haval Weanona, December 30, 19597 
Enclosure I, 



he 

into burets and justifying progress and budgets to external 
authority; r avid! I jreau policy and objectives 
for program m ment. s Assistant Chief for Program and 

Management Plans will act for the Assistant Chief for Program 
Management in his absence. 

Implementation of Reorganization 
The management policy as stated above resulted in a 
shift of functional components within the Bureau \\ T lth respect 
to the Bureau* s budget. oreas the Assistant Chief for Program 
and Management was made responsible for "translating programs 
into budgets and justifying programs and buagets to external 
authority," the Comptroller's responsibility was reduced to 
"preparing the Bureau's budget and participating in the justifica- 
tion of Bureau budgets at all levels of review." As a result of 
the shift of responsibility for the Bureau's budget, approximate- 
ly 30 budget administration personnel were transferred from the 
Office of the Comptroller to the Office of the Assistant Chief 
for Program and Management Plans it implementing the new 
management policy. 

This move of qualified budget personnel from the 
Comptroller area, without replacement in kind, relegated the 
Comptroller's function with respect to the Bureau budget to 
essentially the following functions: 

1. Issuing broad Bureau budget policy. 

2. Issuing budget call, 

3» Limited participation in review and analysis. 
4. Editing, typing and transmission of the Bureau's 
budget. 



47 

5. Limited participation in the budget review 
process. 

6. Limited participation in the development 
of reclamas. 

7. Responsibility for green sheets. 

8. r esponsibility for expenditure estimates. 

9. Responsibility for bureau chart of accounts. 

In the area of St&tiOD budgets j the Comptroller main- 
tained responsibility for: 

1. Coordination. 

2. Policy formulation. 
3< Issuinr budget calls. 

4. Receipt of initial station submission. 

5. Participating with operating Assistant Chiefs 
of Bureau in mark-up. 

6. Release of marked-up budgets to stations. 

7. Receipt and summation of Quarterly Summary Analysis. 



CHAPTER VII 
C OKC LUS IONS 

The conclusions drawn by the writer as a result of 
studying the development and the existing Comptrollership func- 
tion in the Bureau of Weapons are as follows : 

1. The basic functions of the Comptroller as outlined 
in Chapter V, and the organization and delegation of authority 
In this area, as developed and recommended by the Organizational 
Planning Group, euuowpasp. the general basic Comptrollership 
functions adhered to by the military departments and business 
organizations. The design of the overall Comptrollership 
concept follows the basic principles of the Navy Comptroller 
organization, the parent Bureaus, and the other bureaus and 
offices of the Navy Department, 

These basic concepts and organizational policy are con- 
tained in the Navy Controllers Manual, Chapter 2, entitled 
"Establishment of Comptroller Organizations in Bureaus, Head- 
quarters, Offices, end Field Activities of the Navy and Marine 
Corps. By adopting these basic concepts and the recommended 
organizational policy, lower echelons in the chain of command 
with due regard to size, alas ion, number of personnel, etc., 
may follow the pattern and duplicate the Comptroller organization 
of the next higher echelon of command. This is particularly 
advantageous in the Comptrollership function since in many cases 

48 



49 
It facilitates direct communications, direct mutual interest 
and provides a channel for functional or technical instructions 
and reports. 

2. The functional responsibilities of the Comptroller, 

Bureau of Weapons, as developed and recommended by the 

Organizational Planning Group, conforms with the Comptroller 

functions of the military departments as contained in Public Law 

216 wherein it is described that 

the comptrollers of the military departments shall 
be responsible- for all budgeting, accounting, progress 
and statistical reporting, and internal audit in their 
respective departments and for the administrative 
structure and managerial procedures relating thereto. 

In addition, the designed functional responsibilities follow 
the implementation of Public Law 216 and. the expansion of these 
policies as promulgated by the Secretary of Defense. In his 
memorandum setting forth ''Comptroller Functions and Organization," 
the Secretary of Defense added the supervisory responsibility 
with respect to disbursing and receiving cash; the implementation 
of working capital funds; and statistical and progress reporting 
including the analysis and interpretation of reports. He 
specifically referred to various types of accounting, appropria- 
tion, property, and cost accounting — as well as all phases of 
budget administration. 

3. The sound Comptrollership philosophy that was 
developed for the Comptroller, Bureau of Naval eapons by the 
Organizational Planning Group was greatly modified by the 
promulgation of BUWEPS Instruction 5200.2. The removal of the 

■^Secretary of Defense Memorandum to the Secretaries of 
the Army, Navy, and Air Force, Comptro ller Functions and 
Organizatio n, September 27, 1950. 



50 
responsibility for the budget and the personnel to perforin the 
budget function from the Comptroller office is considered to 
be a radical departure from existing practice, both within 
the military departments and business organizations. The close 
relationship between budgeting and program management is recog- 
nized; however the Corap troll ership function within military 
and business organizations is structured around the budget 

function. Inherent in the Comptr oil ership area of responsibility 

p 
is the functional interrelatedness which is exemplified by: 

a) The impact of accounting classifications, policies 
and procedures upon budget administration, and vice-versa. 

b) The relation of financial and program reports and 
analysis with budget execution. 

c) The impact of working capital funds upon organiza- 
tion, budget, and accounting methods , 

d) The relation of work measurement to costing and to 
program and budget execution. 

The relationship of the accounting and budgeting function 

3 

as interpreted by one authority is as follows: 

From the standpoint of sound business organization 
it would seem almost self-evident that the chief 
accounting officer is the logical person to assume 
responsibility for providing management with the 
information it needs to plan and control operations. 
It is his duty to construct and maintain the basic 
records of the business, In which the results of 
all operations are recorded and summarized; and 

p 

"Frederick G. Kosher* Program 3udKt?tlng. Theory and 

Pract ice (Washington: Public Administration Service, 1954) » 

p, 224. ' 

•7. 

T. F. Brad shaw and C. C. Hull (eds«) Coroptrollershlo 
in Modern Management (Chicago: Richard D. Irwin, Inc., 1950)7 
p. 48. 



51 

because he has no line-operating responsibility, 
he is in a position to report and interpret 
objectively the data available in these records. 

4. The placing of the budget function, the translating 
of programs into budgets, the justification of budgets to 
external authority, and the apportionment of funds, under the 
Assistant Chief for Programs Management, gives greater power in 
rank status to these functions, since the Assistant Chief for 
Programs Management is headed by a Rear Admiral and the 
Comptroller office is headed by a Captain, However, it does 
not follow the basic concept of the ''horizontal organization" 
originally proposed for the Bureau. Also, it does not follow 
the basic organizational philosophy of separating staff and line 
functions. Placing the budgeting or financial planning^ the 
Justification cf the budget, and the expenditure or appropriation 
of funds under one element, the Program Management Organization 
results in a vertical and autonomous organization and in the 
opinions of some, could eventually result in biased and subjective 
interpretation and reporting of results. 

5. The removal of the budget function which is the 
nucleus of the Comptroller function from the office of the 
Comptroller has relegated the orimary duties and responsibilities 
of the Comptroller to that of accounting and record keeping. 

In order not to portray mis interpretation, it would seem logical 
that the title of this office should be ch to coincide with 
the remaining functions and. reeponsibllitlef 1 rformed. 

An alternative to the existing organization was 
considered and rejected by the Organizational Planning Ch-o 



52 
that is, to place the Comptroller as a Staff Assistant to the 
Deputy Chief for Program Management. Due to the interrelation- 
ship of the Comptroller functions with respect to budgeting, 
it would seem more reasonable to adopt this plan than to remove 
the budget function from the Office of the Comptroller. With 
full authority over the budget function, there would be a 
relatively small additional transfer or concentration of respon- 
sibilities if the remaining Comptroller functions were incor- 
porated in the Program Management Organization. 

7. Further emphasis regarding the importance of keeping 
the Comptrollership function Intact may be found in the following 

synthesis of the controller concept, as it If reflected in the 

4 
writings of controllers and students of controllership. 

a) Decisions on business policy and management can be 
wise only if they are based upon a knowledge and understanding of 
the relevant facts and figures (terms which are virtually 
synonymized) , intelligently and objectively interpreted. This 

it may be noted, is perhaps the fundamental principle of the 
philosophy and movement commonly known as scientific management. 

b) The basic and ultimately the only criterion of busi- 
ness success and failure Is profit or loss, which, in the last 
analysis, can be measured only in monetary terms. Financial 
data must therefore be the core of information essential to 
business management. 

e) Such data, however, are meaningful only to the extent 

that they are related to measures of operations and work. 

4 

Frederick C. Mosher, op. cit . t p. 9. 



53 
Therefore, the financial reports and the accotjnts must be tied 
in with program and work reports, i.e. statistics. 

d) The controller is the logical, if not the only, 
officer equipped to bring together all these types of informa- 
tion and to interpret the information for top policy and manage- 
ment officers. This is in part because of his and his staff's 
background and technical ability; in part because of his already 
established command of the "core" information on the accounts 
and finances; in part because, having no line responsibility, 
he can be completely unbiased and objective; and, finally, 
because he is in a position to provide information with regard 
to the whole organization, his scope is total. 

e) In order to carry out this role effectively, it is 
essential that the controller operate as staff to, or preferably 
as part of, top management with direct and frequent access to 
the principal manager, as well as to the policy-making board. 
His unique mastery of factual information equips him, at this 
level, not alone to provide the information but also to interpret 
it, and, according to some, to advise on policy and action 
based upon it. 

f) The controller should provide appropriate information, 
services, and advice to other departments of the organization. 
But he must also act as coordinator of their operations insofar 

as they perform functions for which the controller is responsible; 
that is, finances, accounting, reporting, and others. This 
responsibility necessitates that the controller operate at a 
level above the regular operating departments. 

g) Forward looking plans and budgets rest upon intelligent 



54 
forecasts which in turn depend upon an understanding of past 
experience, the present situation, and trend?. With regard to 
budgets in particular, such information is very largely 
financial, accounting, and statistical in nature. It is there- 
fore appropriate or essential that the controller have primary 
responsibility for supervising the development of the budget, 
for coordinating its content, for presenting it, and for 
coordinating its execution. 

8. The separation of the budget, responsibility frort 
the Comptrollershin function in the Bureau of Weapons is unique 
in both military and business organizations. Whether It evolved 
from a new organizational philosophy or in deference to persona- 
lity complexities, it is not considered to be policy trend with 
respect to the Comptroller function. Whether it will Throve to 
be successful as it presently exists or whether the Bureau of 
Naval Weapons will eventually revert to the generally accepted 
Comptrollership organization and functions remains to be seen. 



BIBLIOGRAPHY 

Bradshaw, T. F. and Hull, C. C. (ed.). Cogrotrollership in 

Modern Management . Chicago: Richard D. Irwin, Inc., 1950. 

Bureau of Aeronautics. Organization and Procedure Manual . 

Bureau of l^aval Weapons, BUWEPS 5200.2. Management Policy 
for the Bureau of Naval Weapons . December 30, 1959. 

Bureau of Naval Weapons. Operational Planning, Group Memorandum . 
17 August 1959. 

Bureau of Naval Weapons Organizational Planning Instruction 
Number 7. Basic Concepts of the Organization of the 
Bureau of Naval Weapons . 31 Kugust 1959. 

Bureau of Ordnance. Organization and Procedure Manual * 

Joint Memorandum (Chief, Bureau of Ordnance and Chief, Bureau 
of Aeronautics). Organizational Planning for the Bureau 
of Naval Weapons. Comptroller A rea, 28 August 1959. 

Mosher, Frederick C. Program Budgeting Theory and Practice . 
Washlnp:ton : Public Administration Service", 1954. 

Navy Management Review, NAVEXOS P-910, Vol. IV, No. 10, 
OetoPeY 1959. 

Secretary of Defense Memorandum to the Secretaries of the Army, 
Navy, and Air Force. " Comptroller Functions and 
Organization ". September 27, 1950. 



55